Spanish banks halt evictions for 2 years

SPAIN

Published 11:34 pm, Monday, November 12, 2012

In Madrid, demonstrators coping with the second recession in three years demand a stop to evictions, which have affected more than 350,000 people.

In Madrid, demonstrators coping with the second recession in three years demand a stop to evictions, which have affected more than 350,000 people.

Photo: Daniel Ochoa De Olza, Associated Press

Spanish banks halt evictions for 2 years

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Madrid --

Spain's major banks have agreed to suspend evictions of the most financially vulnerable homeowners, a move to take the heat out of an increasingly dramatic issue that has affected thousands and shocked the nation with two suicides in recent weeks.

The Spanish Banking Association declared the two-year halt on Monday, when officials from the conservative government were due to hold talks with leading Socialist opposition party members to agree on new rules governing evictions.

Public attention on the talks intensified since a person about to suffer eviction committed suicide Friday, the second such case in just over two weeks.

Debate is centered on Spain's unusually tough rules for mortgage holders - homeowners unable to make monthly payments may be evicted but also remain liable to repay whatever value is left on the mortgage after the repossession. More than 350,000 people have lost their homes in this way over the past four years, many because they have lost their jobs or seen their wages plummet due to the crisis.

In the United States, people who default can return the keys to the bank and walk away from their debt.

The Spanish bank group said it had taken the decision following talks with government officials last week. It added that it wanted "to help alleviate the situation of helplessness that many people are suffering owing to the economic crisis."

On Monday, the evictions of at least two couples in Madrid and one in eastern Valencia were called off. As in other cases, crowds of protesters had gathered outside the apartment buildings to try to prevent police and court officials from entering. The protest movement has gathered momentum nationally in recent years as the dramatic impact of the repossessions has increasingly angered Spaniards.

Spain is in its second recession in three years following a property crash in 2008. The government predicts its economy will not grow until 2014. Unemployment is at 25 percent, the highest among the 17 nations using the euro.

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Spain's General Council of the Judiciary, a police union and opposition parties have all come out in recent days to demand new legislation to end the widespread evictions.

Last week, the European Court of Justice's advocate general, Juliane Kokott, said Spain's rules regarding evictions were at odds with European Union customer protection requirements. Prime Minister Mariano Rajoy later pledged to begin work on agreeing to necessary modifications.

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